Pharma has long relied on a complex global flow of raw materials, manufacturing resources, and logistic information to supply the global market with injectable drug products. While this system has weathered many challenges over time, it’s also one that has repeatedly proven its robustness and resilience. Today, however, stakeholders across the parenteral product value chain find themselves navigating many fast-changing challenges and unpredictable developments.
Some are familiar but evolving quickly, especially challenges related to the regulatory, financial, and technological frameworks that increasingly shape the global sterile injectable supply chain. Others, like new injectable modalities and growing geopolitical friction, are creating both new strains and opportunities. Leading, global CDMOs specializing in sterile injectables operate at the forefront of these dynamics. This article offers an expert, experience-based perspective on how parenteral product supply chains are evolving, what these changes may mean for value chain stakeholders, and how manufacturers can optimize their operations for a new era.
Today’s new normal
Several years after the pandemic’s acute disruptions have passed, we can see our industry’s global logistic system reaching a new equilibrium. In most areas of the value chain, the security of supply established before COVID has been successfully restored. At the same time, this return to stability has brought new challenges: substantially more operational scrutiny, heightened expectations for proactive preparation, and unsettled geopolitics keeping supply chains at continual risk.
At warehouses and logistics centers, this new reality is already being felt in day-to-day operations — often through shifting customer expectations for on-hand “security stock.” While some CDMOs may have pursued cost-saving “zero inventory” strategies before COVID, most manufacturers have historically hedged against unexpected shortages and disruptions by keeping a certain amount of customers’ raw materials, supplies, and resources in stock.
Today, following the industry’s scarring pandemic experience, many drug owners are not only mandating on-hand inventory but also substantially increasing the amount of stock they expect CDMOs to hold in reserve.
As a result, commercially available inventories of both raw materials and some finished products are often reduced by just-in-case purchasing, while CDMOs face pressure to expand their storage footprint to accommodate far more on-hand resources. The zero-inventory approach has also largely been abandoned.
Significant new regulations are also a visible and impactful feature of the new post-COVID market scenario. Stung by the pandemic’s global disruptions, authorities in many major markets have either launched or proposed new regulations intended to protect and reinforce their drug product supply chains. In the US, the Drug Supply Chain Security Act (DSCSA) has substantially raised the bar for supply chain visibility to unit-level tracking of product shipments — a requirement that many forward-thinking CDMOs were already well-prepared for. Authorities in many markets — the US, EU, and Asia included — are also proposing strategies and requirements aimed at strengthening supply chains by moving them closer to home. Much remains to be seen about how these new regulations will develop and be implemented, but their primary intent is clear: securing drug product supply chains by reshoring them.
That goal, of course, reflects the many geopolitical tensions driving administrations to incentivize bringing home manufacturing and logistics — especially for vital products like many medications. This trend will be closely watched by many value chain partners, as it may create both new regional opportunities and more demands which will cause industry leaders to rethink established global supply chains.
Either way, this evolving dynamic is already compounding a pressure point that has emerged in the parenteral product supply chain in just the last few years: demand for products at two very different ends of the production scale.
Polarized production demands
Until recently, the future of the pharmaceutical pipeline seemed clear: Less reliance on a few flagship therapies produced millions of doses at a time, and more focus on highly specialized products with niche patient populations and vastly small batch sizes. Recently, however, the sterile injectable market has found itself navigating a significant swerve in this trend.
Today, a new generation of blockbuster injectables has emerged to dominate the parenteral product market — while at the same time, the global pipeline of parenteral products continues to fill with many specialized, small-volume products. As a result, supply chain and logistics stakeholders find themselves challenged to manage two very different demands in parallel: creating efficient, consolidated, scaled-up systems to support mass production while also optimizing for the flexibility required for small-volume manufacturing.
Preparing for growth in both scenarios is an increasing challenge for many CDMOs, even specialized manufacturers that already support high-volume and small-batch production. Doing so requires precision orchestration of resources, materials, and personnel across the organization: for example, optimizing logistic facilities to supply both high-speed, high-volume filling lines and clean rooms with regular product-to-product changeovers.
What’s more, patient preferences and competitive forces are also pushing many blockbuster owners to adopt delivery devices like autoinjectors and injector pens: formats with significantly more demanding supply requirements. To produce these in-demand products at scale, CDMOs must manage material, resource, and logistics processes for both aseptic filling and device assembly and packaging — two closely integrated but very unique processes that each demand their own supply chain expertise.
Further investment in infrastructure is often called for as well. To support two opposite manufacturing scenarios in parallel, often for products with complex device-based formats, a CDMO may need significantly more storage space for a much greater number and variety of products: From all the individual needs of a portfolio of specialized vial-based products to the commercial-scale supply requirements of a mass-produced, autoinjector-based therapy.
Even CDMOs that focus specifically on smaller-volume products may now find themselves absorbing more projects displaced by facilities optimizing for high-volume batches, therefore needing to swiftly scale their specialized processing resources in response.
These specialists are far from alone in needing to evolve their infrastructure. In fact, this kind of investment has become a key priority for many sterile manufacturers working to adapt to this increasingly two-ended market. Two areas are rising as the focus of these strategies: digitizing and automating logistics and expanding cold chain resources.
Digitalization and cold chain
Familiar forces are driving the focus on both of these areas: The need to balance compliance with growing cost pressures across the value chain and sustained growth in demand for complex, sensitive parenteral products.
Today’s CDMOs are downstream from many challenging financial dynamics squeezing the sterile injectable market, from tight capital markets to customer cost-cutting efforts, to impending patent cliffs and national cost-control strategies. Predictably, these pressures have given manufacturing partners the difficult task of fulfilling production contracts as cost-consciously as possible while still achieving the highest possible levels of quality and compliance.
In response, many sterile manufacturers are eagerly adopting efficiency-driving digital technologies across their businesses, including their logistic services. Within those specialized groups, technological investments are taking many different forms. Digital inventory management systems, logbooks, and shipping records are quickly becoming a new standard for CDMOs seeking to streamline their supply chain operations, reduce administrative overhead, and optimize compliance with tightening data integrity requirements. Elsewhere in their facilities, many supply chain and logistics leaders are also automating physical inventory handling, leveraging robotics in their warehouses, and further strengthening track-and-trace systems needed to comply with regulators like the DSCSA.
At the same time, growing demand for sensitive parenteral molecules is also driving CDMOs to invest in their cold chain infrastructure. Refrigerated facilities, storage areas, and handling processes, chilled, freezing, and sub-freezing, are all vital for any sterile manufacturer processing complex biologic products, most of which require end-to-end cooling throughout their production cycle. For advanced manufacturers, however, expanding refrigerated space is only the start: State-of-the-art digital monitoring systems are also an increasingly important feature of the facilities and workflows used to process refrigerated drug products.
These systems now play a vital role in both operational and regulatory areas of cold chain management, continually tracking product and environmental temperatures, enabling audit-ready tracking, and verifying that products remain within compliant temperature parameters at all times. At the same time, however, the importance of these systems also reflects a bigger compliance trend in aseptic manufacturing. Explicitly supply chain-focused regulations aren’t the only ones that CDMOs’ logistic services are adapting to: They’re also navigating many broader mandates that are reaching deeper into manufacturing organizations than ever.
Regulatory ripple effects
While many recent mandates have taken direct aim at the pharmaceutical supply chain, many more general regulations are now being extended to logistic functions too. In the U.S., the FDA’s pre-approval inspection (PAI) requirement establishes the general expectation that CDMOs demonstrate “a commitment to quality” across their manufacturing process, both physical and digital. For logistic service units, that expectation has brought more scrutiny on how products travel not just through filling lines but also facilities, warehouses, and storage areas—with added attention now being paid to how quality is protected from shelf to batch release.
The PAI program also has a strong focus on data management integrity, which has created additional urgency to audit-proof digital tracking and reporting systems. Meanwhile, in the EU, most forward-thinking aseptic manufacturers have already implemented robust Annex 1 compliance programs and proactively addressed many of the regulation’s requirements for their core production facilities.
Elsewhere in the organization, however, many finer details are still being worked out in day-to-day operations. Over time, regulators and logistic service teams will undoubtedly find an alignment on these challenges and arrive at clear compliance expectations for the parenteral product supply chain.
